US Treasury yields rose to their highest levels in 10 months as investors digested two hotter-than-expected inflation readings.

The 10-year Treasury yield (^TNX) edged up toward the key 4.5% level and was sitting at 4.48% on Wednesday morning. It is currently at its highest level since July of last year.

The longer-dated 30-year yield (^TYX) also traded at a 10-month high and rose back above the key psychological level of 5%, while the 5-year yield (^FVX) rose slightly to 4.14%.

Bond yields and prices move in opposite directions, meaning when yields rise, prices fall.

The 4.5% level on the 10-year yield and 5% level on the 30-year yield are seen as critical levels that can begin to exert downward pressure on equities. On Tuesday, veteran market strategist Ed Yardeni told Bloomberg TV he’s not “freaked out” by the move higher.

“I kind of view bond yields of four and a quarter percent to four and three-quarter percent as normal — I’m not getting freaked out by it,” Yardeni told Bloomberg. “The US bond is still viewed as the safe haven, and there’s plenty of reasons to worry about things these days.”

All three bond yields have moved up between 2%-4% over the past five days as markets priced in higher inflation expectations and a higher likelihood that the Federal Reserve would delay interest rate cuts or even potentially hike rates this year.

On Wednesday, wholesale inflation data fueled higher inflation expectations as the Producer Price Index (PPI) showed headline wholesale prices rose by 6% on an annual basis in April. That came on the heels of a hot Consumer Price Index (CPI) report on Tuesday that also showed consumer price increases accelerated in April.

Following those reports, markets priced in a 36% chance of a rate hike by December, according to CME Group’s FedWatch, up from a roughly 16% probability a week ago.

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